Govt may issue gold bonds based on need assessment, says source
This story was originally published at 21:42 IST on 26 September 2024
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--Govt source: To issue gold bonds as and when needed per assessment
NEW DELHI – The government may issue sovereign gold bonds as and when needed as per its assessment, a finance ministry official said. In the Budget presented on Jul. 23, the Centre lowered the gross sovereign gold bonds issuances to 185 bln rupees from 296.38 bln rupees in the Interim Budget presented on Feb. 1.
The government introduced the gold bond scheme in 2015 to curb heavy imports of the precious metal. Investors in the bonds are paid 2.5% interest per annum. At maturity, the bonds are redeemed at the prevailing price of gold.
The return on investments in gold bonds has been over 100%. The government wants to avoid issuance of these bonds as they are among the more expensive means to fund the fiscal deficit, a senior finance ministry official earlier said.
The Centre finances its fiscal deficit with several instruments, including dated securities, national small savings fund, provident funds, and other tools like the sovereign gold bonds, the report said. End
Reported by Krity Ambey and Sagar Sen
Edited by Rajeev Pai
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